Expert Industries Limited is engaged in petrochemical business. Due to nature of its business, the company has hired PQR Associates, a reputed firm…

(a) As per SA 500, “Audit Evidence”, if the entity has employed or engaged experts, the auditor may rely on the works of experts, provided he is satisfied that sufficient and appropriate audit evidence is obtained with reasonable assurance to form an opinion on the financial statements. When information to be used as audit evidence has been prepared using the work of a management's expert, the auditor shall, to the extent necessary, having regard to the significance of that expert's work for the auditor's purposes: (a) Evaluate the competence, capabilities and objectivity of that expert (b) Obtain an understanding of the work of that expert and (c) Evaluate the appropriateness of that expert's work as audit evidence for the relevant assertion. Before using the work of PQR Associates, management's expert, auditor should ensure that the criteria mentioned above are fulfilled.